With the date of the budget fast approaching, all eyes are on new chancellor Rishi Sunak to come up with the goods that will stimulate the property market and home buyers. We’ve already talked about what the March budget could have in store for home buyers and sellers.
Now, as the big date approaches, and people ask the question ‘what will this mean for me and my pocket?’ we look at some of the other factors that could influence the contents of that red box.
Could this be the ‘big thinking’ budget?
The Intermediary Lenders Association (IMLA), who represent UK mortgage lenders, certainly hope so. And they have stated where they believe the government should focus their spending. They think promising to build ‘at least’ 1 million new houses over the next five years isn’t ambitious enough, and point to data that reveals 240,000 new homes were completed in 2018-19 alone. With Boris’ ‘think big’ approach to infrastructure very much in the news, could this also come through in his government’s approach to creating the homes the property market needs to meet demand from home buyers.
Will there be a focus on not just big, but right?
The IMLA also argues that the property market needs to have the right kinds of homes available for the market. This means homes that are well-built, energy efficient, and surrounded by well-planned infrastructure, such as roads and hospitals. If the budget is to meet expectations as a defining statement on how a post-Brexit Britain will work, this could be a key focus.
Green relief to reduce the costs of improvements?
Bodies such as the Royal Institution of Chartered Surveyors have been asking the government to focus more on the environment for years. This could influence the budget with reductions in VAT for sustainable home improvements, for example.
Plans to turn the ‘Boris bounce’ into a long-term upswing in the property market?
Most estate agents will agree that 2019 was a challenging year, and point the finger at Brexit-led uncertainty, low availability of properties further up the ladder, and a lack of faith in a minority government. However… 2020 looks to be a different beast, and there are already signs of cautious optimism as pent up demand trickles into the market.
In reality, the market is still in a risky place. For instance, current estimates suggest that 80% of first time home buyers have purchased new build properties, many of whom were able to do so with the Help to Buy scheme. This has now made it difficult for these buyers to sell their properties on the market as they look to move up the ladder. This issue has the potential to affect chains, which means the property market as a whole will feel the tug. Can Rishi Sunak take steps to mitigate this? Could a Help to Buy successor scheme, which could include help for home buyers moving up the ladder, be muted?
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